Finding Text
2023-004: 240 Days Outstanding Check
Federal Agency: Department of Education
Federal Program Name: Student Financial Assistance Cluster
Assistance Listing Number: Various
Federal Award Identification Number and Year: Various
Award Period: July 1, 2022 through June 30, 2023
Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters
Criteria: The Code of Federal Regulations, 34 CFR 668.164 states that an institution must return to the Department of Education, any Title IV funds that it attempts to disburse directly to a student or parent that are not received by the student or parent. If an EFT to a student's or parent's financial account is rejected, or a check to a student or parent is returned, the institution may make additional attempts to disburse the funds, provided that those attempts are made not later than 45 days after the EFT was rejected or the check returned. In cases where the institution does not make another attempt, the funds must be returned to the Department of Education before the end of this 45-day period. If a check is sent to a student or parent is not returned to the institution but is not cashed, the institution must return the funds to the Department of Education no later than 240 days after the date it first issued the check. In addition, 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.
Condition: Our audit identified checks were being cancelled within the 240-day timeframe, however the District was not able to provide support that the Department of Education’s Common Origination and Disbursement (COD) website was being updated within the allowable timeframe.
Questioned Costs: Unknown.
Context: The District disbursed $9,065,178 in Title IV awards during fiscal year 2022-23. The District provided a population of 1,076 checks outside the 240-day timeframe, totaling $958,167. However, we were unable to obtain actual questioned costs, as the population provided by the District included cancelled and reissued checks, resulting in duplication with the population.
Cause: The District's existing procedures do not provide sufficient documentation to support compliance with Title IV regulations
Effect: The District was unable to establish compliance with the Title IV regulation.
Repeat Finding: Yes, see Finding 2022-005.
Recommendation: We recommend the District re-evaluate their procedures for processing and documenting outstanding Title IV funds to the Department of Education.
Views of responsible officials: Management concurs with the finding and plans to correct the finding.